Fee change eyed to lure businesses to Eastern Boulevard in Hagerstown

June 16, 2011|By KATE S. ALEXANDER | kate.alexander@herald-mail.com

HAGERSTOWN — Businesses could soon have additional incentive to locate to Eastern Boulevard in Hagerstown.

The Hagerstown City Council Tuesday night discussed introducing an ordinance that would temporarily reduce the Eastern Boulevard improvement fee for new development along the recently improved thoroughfare.

The improvement fee was imposed in 2004 in a designated fee district as a way for the city to recover $1.3 million of the $5.2 million it invested in widening Eastern Boulevard, according to city documents.

The proposed ordinance would reduce the improvement fee on a sliding scale, starting at 50 percent from now through the end of 2012 and eventually to 30 percent by the end of 2014.

Under the original fee structure, a sum of $1,000 per residential unit was charged for residential development, city documents said.

For nonresidential development, $5 per square foot was charged for usable retail space, and $3 per square foot for usable office space and all other non-residential uses.

In May, the city introduced an ordinance to amortize the Eastern Boulevard Improvement fees. Fees totaling $50,000 or less could be paid over a three-year span, while fees in excess of $50,000 could be paid over a five year span, the documents said.

City officials Tuesday proposed cutting the improvement fee in half through 2014, but in a majority consensus, the five-member council said it would only reduce the fee on a sliding scale.

Councilman William Breichner said he opposed any reduction to the fee.

He said the area around Eastern Boulevard is growing faster than any in the city, and he did not see the merits of charging half the fee in an area developers were favoring under current conditions.

“My problem with this whole proposal is that right now we probably have more development between Jefferson Boulevard and Dual Highway than anywhere,” he said.

Councilwoman Ashley C. Haywood suggested that a sliding scale would be a middle ground.

She said it would provide strong incentive for businesses to locate to the area now when it is most needed, but that it would still some offer incentive through 2014.

John Lestitian, director of community and economic development, said that his staff estimated that with the fee cut in half, the city could still recoup almost all of the $1.3 million.

Breichner questioned the fairness of offering incentives to new businesses when other businesses have already paid the full fee.

Councilman Lewis C. Metzner said he would only support cutting the fee in half for a very short time. The city is constantly asked by developers and business for incentives to choose Hagerstown, he said.

“Let there be no misunderstanding, people are going to come in and ask for more incentive,” he said.

Councilman Martin Brubaker pointed out that if the council moves forward with reducing the fees, developers and business would not be eligible for both a reduction and amortization of the fee.

He also said that if the reduced fee draws businesses to Eastern Boulevard, it will supplement the tax base for the city to invest in further incentives to draw other business downtown.